Two California Doctors Agree to Settlements Totaling $375,000 to Resolve Allegations of Fraud Schemes Related to “Electroacupuncture” Devices

FRESNO, Calif. — Zachary J. Lipman MD, of Chico, has paid $290,000 to the United States and Michael Woo-Ming MD, of Murrieta, has agreed to pay $85,000 to the United States to resolve allegations arising from a fraud scheme that caused the submission of hundreds of false claims to Medicare, Acting U.S. Attorney Michele Beckwith announced today.

Both settlements relate to a fraud scheme orchestrated by Riverside County chiropractor Kevin Brown, in which Brown used various companies he owned to seek and receive reimbursement from Medicare for surgically implanted neurostimulators at multiple locations within and beyond California, even though the companies did not perform surgery or implant neurostimulators. In a prior settlement with the United States, Brown stipulated that he and his companies instead taped a disposable “electroacupuncture” device called “Stivax” to their patients’ ears. Stivax devices do not require surgical implantation and are not reimbursable by Medicare. The United States alleges that this scheme violated the False Claims Act and the Anti-Kickback Statute.

With respect to the settlement with Dr. Lipman announced today, the United States had alleged that Lipman solicited and received unlawful kickbacks from Brown in return for Lipman referring his patients to Brown for the furnishing of Stivax devices paid for by Medicare. The settlement with Dr. Woo-Ming resolves allegations that his companies Revive Medical of San Diego, which Woo-Ming co-owned with Brown, and Medical Wellness Group submitted false claims to Medicare for surgically implanted neurostimulators.

“These physicians took part in a fraud scheme at the expense of hardworking taxpayers,” said Acting U.S. Attorney Beckwith. “My office is committed to working with our partners to address fraud schemes like these that divert funds from important federal health care programs like Medicare.”

“Improper financial arrangements can compromise medical judgment, adversely influencing the medical decision-making process,” stated Acting Special Agent in Charge Robb R. Breeden of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG will continue to work with our law enforcement partners to protect the integrity of federal health care programs and those served by those programs.”

The investigation was conducted with the U.S. Department of Health and Human Services, Office of the Inspector General. Assistant U.S. Attorney Emilia P.E. Morris handled the case for the United States.

The settlement agreements can be found here: